Russell Wilson Contract (speculation)

[SilkMonkey]

I can't help but think about how much Percy Harvin makes this year sitting on the bench rehabbing while Russell Wilson is paid less playing every single game. makes me sad

Percy is making $2.5 million
Russell is making $526,217.

 

[Subzero717]

I can't help but think about how much Percy Harvin makes this year sitting on the bench rehabbing while Russell Wilson is paid less playing every single game. makes me sad

Percy is making $2.5 million
Russell is making $526,217.

And Harvin had a 12 million dollar signing bonus. Just sayin.

 

[UK_Seahawk]

I know Sid got plenty o' money, but when it comes to this guy getting paid .... whooooo.... I'm gonna be the guy who helps pick out his suits.

 

[gulliver]

Kobe was right!

The owners (NBA and NFL) are billionaires for a reason --they are quite intelligent, much more so than players. They have created a system where fans side with billionaire owners more than millionaire players who actually play. Russell Wilson is getting a few hundre K per year to play right now. He is without doubt worth 50-75 million PER YEAR to this franchise. The person who writes his check is Paul Allen, one of the richest men on the planet and with more billions than most of this board has hundreds of thousands. Yet the fans want Russell Wilson to take less money "for the team," lol. I wonder why the billionaire owners agreed to this system? Probably because they are billionaires and very intelligent.

Just as a comparison, in a small country like Spain, Real MAdrid PAID almost 150 million dollars just to have the RIGHT to pay 50m per year for a football/soccer player who MAY be in the top 10-15 in the world. 100m Euros they paid Tottenham for Bale --this is just for the right to purchase the player. They also pay him roughly 17m Euros per year AFTER TAXES, so it maybe closer to 35m Euros or around 40-50m dollars per year. The numbers are rough estimates from memory, the exchange rate is .73 Euro to 1.00 Dollar.

I'd say American football is on the same level as World Football or Soccer. Without a salary cap, Russell Wilson would most likely be worth 50-75m per year. Yet fans want him to take 10-15m because the Billionaire owners have lined their own well being with the well being of the team due to the salary cap. I'm not saying fans are wrong, I'm just admiring the billionares.

Silly post IMO. Trying to get people who make $50k a year worked up into a classist frenzy as millionaires negotiate with billionaires.

And the whole post ignores the concept of NFL cap room. I'm glad we don't have Euro-style clubs which pay 9 figures for stars. Things get completely lopsided--look at the Yankees, the Dodgers and now the Red Sox. It's not an interesting 'local' story everyone can rally around when some trillionaire just out-buys megastars from all over the world and brings them to NY/LA/BOS. Even if we wanted to, cap room doesn't allow us to pay these poor exploited millionaires more money.

 

[chrispy]

A day before Wilson signs a contract for 10mil/yr with the Seahawks, he'll sign a 10 mil/yr deal to be Microsoft's spokesman.

 

[Anthony!]

Option A: 1 year at 1mil, 1 year at 16mil and then five years at 20 mil = 37 mil for 3 years or 117mil for 7 years
Option B: 5 years at 16 mil with a 20mil a year contract following = 48mil for 3 years or 120mil for 7 years.

I like your logic here. If we factor in two more components; a discount rate to represent time value of money and a risk factor to represent the likelihood of an injury it helps your argument further. For example, if you assume a 7% discount rate then both options you present would be equal if the initial deal in Option B was $14.8 million/year.

Option A: 1 year at $1m, 1 year at $16m and then five years at $20m = $86.5m NPV in 2015
Option B: 5 years at $14.8m with a 20m a year contract following = $86.5m NPV in 2015

I was thinking about that last night. That 4th year on the rookie pay scale is a huge bargaining chip for the teams. A player could either stay at the small salary for another year and roll the dice that their production and health will maintain - and still be looking at even or less money in a few years OR they could take a bit of a lower per-year now and actually come out ahead after a few years. Get your bonus and a huge pay increase now and you'll have more at the end of the road.

It is just as risky for the team, if the player stays on their rookie contract for the final year and still plays well, the price goes up, and in the case of a QB and a franchise QB if he does get hurt the team also looses. Not a very good game of blink.

 

[Sgt. Largent]

I have no idea what Russell's contract will end up looking like, but I can tell you one thing.

The man has some serious morals and he's the ultimate team player, so I don't expect any ridiculous holdouts or demands for 20 million or trade me type nonsense. Wilson will get paid, but he's not going to hurt this team in the process.

 

[Laloosh]

I have no idea what Russell's contract will end up looking like, but I can tell you one thing.

The man has some serious morals and he's the ultimate team player, so I don't expect any ridiculous holdouts or demands for 20 million or trade me type nonsense. Wilson will get paid, but he's not going to hurt this team in the process.

I don't think that would ever be an easy thing for him but to think that he absolutely wouldn't do it if he and his agent felt that he wasn't getting what he's worth seems naive to me.

In the end (no matter who we're talking about), it's a business. I say this because I would not fault him for any of that when trying to get top dollar based on his market value.

 

[Sgt. Largent]

I have no idea what Russell's contract will end up looking like, but I can tell you one thing.

The man has some serious morals and he's the ultimate team player, so I don't expect any ridiculous holdouts or demands for 20 million or trade me type nonsense. Wilson will get paid, but he's not going to hurt this team in the process.

I don't think that would ever be an easy thing for him but to think that he absolutely wouldn't do it if he and his agent felt that he wasn't getting what he's worth seems naive to me.

In the end (no matter who we're talking about), it's a business. I say this because I would not fault him for any of that when trying to get top dollar based on his market value.

I'm not saying the Hawks will try to take advantage of Wilson's team first mentality. There's a reason you never see guys like Brady, Manning (both Mannings), etc hold out and act like asses during contract years airing their grievances publicly like some players. They quietly take care of business behind closed doors, and never do it to the detriment of the team. They're very conscious of structuring their contracts to best benefit the team's cap situation..............and I fully expect Russell and his agent to follow this formula.

 

[AgentDib]

It is just as risky for the team, if the player stays on their rookie contract for the final year and still plays well, the price goes up, and in the cae of a QB and a franchise QB if he does get hurt the team also looses. Not a very good game of blink.

I agree with you that the injury/performance risk can affect both parties, but the time of value of money component only helps the team. A dollar today is worth more than a dollar tomorrow and so there is a financial incentive for the player to pull that money forward. That financial incentive translates into a smaller contract.

 

[Anthony!]

It is just as risky for the team, if the player stays on their rookie contract for the final year and still plays well, the price goes up, and in the cae of a QB and a franchise QB if he does get hurt the team also looses. Not a very good game of blink.

I agree with you that the injury/performance risk can affect both parties, but the time of value of money component only helps the team. A dollar today is worth more than a dollar tomorrow and so there is a financial incentive for the player to pull that money forward. That financial incentive translates into a smaller contract.

Huh so I should take 10 mil a year now instead of 15 mil a year starting next year? Really, yeah no, not to mention the avg salaries for players go up every year, so a top 10 QB is making less this year then a top 10 would be next year which negates your whole dollar today thing.

 

[telerion]

It is just as risky for the team, if the player stays on their rookie contract for the final year and still plays well, the price goes up, and in the cae of a QB and a franchise QB if he does get hurt the team also looses. Not a very good game of blink.

I agree with you that the injury/performance risk can affect both parties, but the time of value of money component only helps the team. A dollar today is worth more than a dollar tomorrow and so there is a financial incentive for the player to pull that money forward. That financial incentive translates into a smaller contract.

Huh so I should take 10 mil a year now instead of 15 mil a year starting next year? Really, yeah no, not to mention the avg salaries for players go up every year, so a top 10 QB is making less this year then a top 10 would be next year which negates your whole dollar today thing.

From the passage you quoted: it isn't clear to me either why teams should discount the future less than players.

That said, are you disagreeing with the concept of present value? If so, I'd like to enter into a loan contract with you immediately! How about you give $100,000 now, and I'll give you $100,000 back 30 years from now?

 

[AgentDib]

Huh so I should take 10 mil a year now instead of 15 mil a year starting next year?

If your discount rate was 33% or more than yes. And if you think about it for a bit, you may decide that even this extreme rate presents a tougher choice than your first reaction. $10 million could make an immediate impact in the life of you and your family, and you have no idea what will happen over the next year.

The discount rate that I used was 7%, which would be the equivalent of taking $14.1 million today. That is a reasonable figure that I suspect most people would take.

From the passage you quoted: it isn't clear to me either why teams should discount the future less than players.

I may be misunderstanding your point, but the teams are the ones paying the money with incentive to hold onto dollars. The discount rate may be the same for them but it applies in the other direction; they would rather pay $1m next year than $1m this year. Teams will always try to pay for performance now using dollars tomorrow and occasionally that incentive gets them in trouble.

 

[telerion]

I may be misunderstanding your point, but the teams are the ones paying the money with incentive to hold onto dollars. The discount rate may be the same for them but it applies in the other direction; they would rather pay $1m next year than $1m this year. Teams will always try to pay for performance now using dollars tomorrow and occasionally that incentive gets them in trouble.

I think I was the one who was confused. I agree with you here. Once we've used a common discount factor to put all figures in today's dollars, the preference to pay an additional $1 million next year versus this year must come from other issues than just the opportunity cost of money (since that's been priced in by PV). Does the team want to defer payment because some portion of the money is not guaranteed, and deferring transfers risk from the team to the player?

 

[hawk45]

Doesn't make sense from a standpoint of self-interest either. The value of the money in a contract is quantifiable. The benefit to Russell of taking less money is speculative. The front office could piss the money away, or the front office personnel could change, Pete could leave for Texas tomorrow, etc. Not that folks don't make business decisions sometimes based on speculation, but based on speculation of future team performance in today's NFL?

It's not speculative. It's risky; and risk is justifiable if the expected return is sufficiently high. Yes, a front office could piss the savings away. It could just raise the salary of another player that would have been willing to sign for less. It could go to buying better players, but many of them get injured and hardly play. There are a lot of risks. Personally, I would get as much as I can now (especially since most NFL careers are short).

As far as studying some sort of correlation, what a waste of time and money that would be. Firstly you couldn't do it because you couldn't isolate hardly any of the infinite variables. Secondly if you could do it, its predictive value would be nil because it would basically say "if you don't have an awesome front office it doesn't matter one bit if you take a few less bucks, and even if you do have a great front office your team may suck, this is the NFL." That'd really help QBs make future decisions wouldn't it.

1) With sufficient data, you can approximate such a return. Scientists and mathematicians do so with harder problems everyday. Very unlikely that you could put tight errors on any estimate, but interesting exercise nonetheless. You might think it's a waste of time, but you know that's just like your opinion man.

2) Again it would have some predictive value because you could use it to calculate an expected return. Could you send a man to the moon with the accuracy? No. But the concerns you raise can (at least theoretically) be quantified in a model.

Finally even if a QB's agent never used such a calculation in practice it would still be an interesting research question. Basically, it's high stakes decision making in the face of uncertainty. Maybe not your favorite hobby (and that's okay), but hardly worthless. People get paid very good money to study problems like that.

Er...speculative is defined as: (of an investment) involving a high risk of loss. I'm not quite sure what you mean, then, by responding that "it's not speculative. It's risky."

My personal definition of a waste of time is, a study that (even if you could construct it) would not tell you much beyond what you already know.

Scientists and mathematicians can do things with relatively little data, but not when huge, all-determining variables such as does-a-bum-GM-get-hired can't be quantified, let alone locked down. State Estimation of electrical networks, for example, is all about making a good "guess" and assigning weights and probabilities, but electricity (and most things where scientists and mathematicians are involved) does at its base level follow a set of predictable rules. If we remove the words "scientists and mathematicians" and substitute "psychologists, sociologists, economists" then yes we may find some out-there studies. I am not disparaging those professions BTW, I am certain folks conducting studies within those context are painfully aware of the limitations when the variables get wacky.

And how are you ever going to find "sufficient data"? You can examine the history of teams since the start of football, but again, all of the variables (even huge external variables like the structure of the CBA) change from moment to moment, so in order to compare one single team to one single other team you would need so many fudge factors you're treading on useless right there. Now tack a big fat exponent on the impact of the fudge factors when you try and bring in the data from the rest of the teams across the rest of the years.

If you could construct the study, you'd attach a giant qualifier that its predictive value is rendered instantly worthless if the team has a bunch of suspensions, injuries, front office changes, any number of things that happen every year. So in other words, it has no predictive value that any player gambling millions of dollars would pay the slightest attention to.

You define interesting as: something that dudes talking in bar after 20 drinks think it would be neat to study.
I define interesting as: something that anyone on any planet would ever fund. Imagine your sales pitch for funding here.

When a proposed study amounts to having a crystal ball, it's beer-conversation. That's fine, and it's interesting beer-conversation, but that's all it is.

Dib is the resident expert on quantifying that which cannot be quantified, and I will bet that he could find a way to limit the study so that it would be both useful and possible. But a few words about not being able to tighten estimates seems insufficient in waving away the central issue hamstringing the whole enterprise.

Sorry for the tone, seriously, I will call myself an a-hole and save you the trouble. Obviously I was traumatized as a child by a study.

And welcome to the board!

 

[Uffda]

Think about it this way, what would other teams pay to have Wilson ?

 

[hawk45]

Slight clarification, originally I said that taking a discount doesn't make any sense from a standpoint of self-interest. I was specifically referring to the idea of endorsements perhaps being higher.

If you broaden the discussion to the human factors like small v large market, teammates, loyalty, community, etc., then I DO think that it's possible for Russell to feel a discount to be in his self-interest, because as has been pointed out, he may value those things more highly than the money being discounted.

Although I think if Russell felt that way, his wife or his inner businessman would quickly point out that he will still retain the loyalty, teammates, coaching staff, etc. with a huge contract because the Hawks are clearly going to pay whatever he asks. The only thing possibly being jeopardized is the winning, and that's the area where I feel like there just isn't enough of a direct line between a discount and winning to make the sacrifice worthwhile. Other QBs have disagreed though. Brady (and he was burned by it as his team set out on a rampage to rid the roster of any weapons he liked, so that isn't the best example) and other QBs have done it.

 

[SeaTown81]

The apartment building that I live in was recently sold, and everyone in the complex is getting the boot. If I wanted to move back in after the remodel, my rent would be DOUBLE what I'm paying now. It's really easy to get angry and bitter about it. But if I'm to be honest, I've had ridiculously cheap rent in a great neighborhood for 8 years now. I can focus on being bitter about the future, or I can be realistic about how good I've had it in the past. It's the exact same with the Hawks and RW. We're getting him stupid cheap for 3 years. He's worth what he gets down the road.

 

[telerion]

Speculative as in purchasing an asset purely on the hope that some one else will buy it at a higher price in the near future.

Risk as in facing a lottery over outcomes some of which are associated with a value below the average of the set.

Look. It's a common misconception that the existence of many variables that exert some influence on an outcome make it impossible to calculate an expectation and some standard errors. For instance far more variables probably influence the labor earnings of an individual over their lifetime, nevertheless with a bit of data about age, education, location, profession, race, and sex (unfortunately for the last two), one can make a pretty good guess. The standard error would be pretty low.

No, the influence of a large number of variables does not make it impossible because of a combination of the following:

1) Most of the variables have extremely little influence on the final outcome
2) Most of the variables have a small likelihood of occurring so they practically disappear in an expectation
3) Some of the variables are strongly correlated with other explanatory variables that are measured and so are well proxied by them.

No, the bigger problem is not the number of variables. The real difficulty is strategic behavior. It's why even though one can well-estimate your lifetime earnings, no bank will allow you to borrow the entire present value of that number. Once the bank gives you the money, you won't bother working and your labor income won't be what was expected. There's moral hazard. That's approachable but far more challenging.

Sorry for the tone, seriously, I will call myself an a-hole and save you the trouble. Obviously I was traumatized as a child by a study.

And welcome to the board!

Why don't you just save us all the time and write, "While I know a lot about football operations, I don't have a clue about what is and isn't possible with quantitative methods, but I like to have an opinion on it anyway."

See? I can be an a-hole too
And thanks, glad to be here!

 

[loafoftatupu]

Russell deserves every dollar he gets. He should take it while he can and likely will. I could see it being very creative and I could see some balance from him trying to keep the cap in a range that benefits the team. We'll see when it happens, but I won't be surprised to see something unique from Russell. The guy is a total gamer and wants to have high pay combined with long term success.

So we can all guess, but the way PC/JS roll there is bound to be something a little different than the norm. These guys have built a contender out of nothing in 2 years. I have no doubt that they will be able to work a continuous level of that success. Everyone else has to follow the same rules, so in the big picture they have it no worse than anyone else.